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The premise of this tactic was that the battle tanks that formed the outer edge would have a mobile support structure that accompanied them at all times, making it easier to maintain and equip them. The tactical advantage was that it allowed the Germans to progress more efficiently and at less risk to their battle tanks. The US Marines have since developed a Combined Arms Regiment that makes use of similar ideals.

In answer to your original question, it was definitely more than a propaganda ploy. The Germans used it with very positive results, but it was probably implemented too late to have been effective very long. By the time they began deploying such units, their supply lines had become pretty thin. As a result, although they may have had the manpower and equipment to implement such a structure, they were rapidly running out of the fuel and munitions to keep it running.

From the above linked article:

German armor and motorized infantry formations measured their daily advances in terms of forty to fifty miles against determined Soviet resistance. The "Mot Pulk" or motorized square, with trucks and artillery enclosed by a frame of Panzers with Luftwaffe air support overhead became the standard maneuver formation.